ITO 27(1)(2), MUMBAI v. ATUL V. LOTIA, MUMBAI

ITA 5731/MUM/2018 | 2010-2011
Pronouncement Date: 20-11-2019 | Result: Dismissed

Appeal Details

RSA Number 573119914 RSA 2018
Bench Mumbai
Appeal Number ITA 5731/MUM/2018
Duration Of Justice 1 year(s) 1 month(s) 15 day(s)
Appellant ITO 27(1)(2), MUMBAI
Respondent ATUL V. LOTIA, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 20-11-2019
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 20-11-2019
Last Hearing Date 14-11-2019
First Hearing Date 14-11-2019
Assessment Year 2010-2011
Appeal Filed On 05-10-2018
Judgment Text
1 ITA NO.5731/MUM/2018 ATUL V. LOTIA ASSESSMENT YEAR-2010-11 - IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH MUMBAI . . BEFORE HONBLE SHRI C.N. PRASAD JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL AM ./ I.T.A. NO.5731/MUM/2018 ( / ASSESSMENT YEAR:2010-11) I.T.O . WARD 27(1)(2) TOWER NO. 06 4 TH FLOOR R.NO. 407 VASHI RLY STATION COMPLEX VASHI NAVI MUMBAI-400 703. / VS. ATUL V. LOTIA PROP: ATUL STEELS 5/13 NANDLAL POPAT CHAWL GANDHI NAGAR LBS MARG GHATKOPAR (W) MUMBAI-400 086. !'# ./ ./PAN/GIR NO. AAAPL-5329-B ( ! /APPELLANT ) : ( ' ! / RESPONDENT ) ! / APPELLANT BY : SHRI S. MICHAEL JERALD-LD. DR ' ! / RESPONDENT BY : NONE / DATE OF HEARING : 14/11/2019 / DATE OF PRONOUNCEMENT : 20/11/2019 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2010-11 CONTEST THE ORDER OF LD. COMMISSIO NER OF INCOME-TAX (APPEALS)-25 MUMBAI [IN SHORT REFERRED TO AS CIT( A)] APPEAL NO.CIT(A)- 2 ITA NO.5731/MUM/2018 ATUL V. LOTIA ASSESSMENT YEAR-2010-11 25/IT-807/2015-16/195 DATED 05/07/2018 QUA DELETION OF CERTAIN ADDITIONS ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 2. NONE HAS APPEARED FOR ASSESSEE AND NO VALID ADJO URNMENT APPLICATION IS ON RECORD. LEFT WITH NO OPTION WE P ROCEED TO DISPOSE-OFF THE APPEAL AFTER HEARING LEARNED DEPARTMENTAL REPRESENT ATIVE WHO SUPPORTED THE ADDITIONS MADE BY LD.AO. 3.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL STATED TO BE ENGAGED IN BUSINESS UNDER P ROPRIETORSHIP CONCERN NAMELY M/S ATUL STEELS WAS ASSESSED FOR YEAR UNDER CONSIDERATION U/S 143(3) R.W.S. 147 ON 12/02/2016 WHEREIN THE RETURNE D LOSS OF RS.33.42 LACS FILED BY THE ASSESSEE ON 11/10/2010 WAS REDUCED TO RS.24.39 LACS ON ACCOUNT OF ADDITION OF RS.9.01 LACS ON ACCOUNT OF A LLEGED BOGUS PURCHASES. 3.2 PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM THE DGIT (INV.) WING MUMBAI/SALES TAX DEPARTMENT GOVT. OF MAHARASHTRA IT TRANSPIRED THAT THE ASSESSEE STOOD BENEFICIARY OF ACCOMMODATION PURCHAS ES BILLS AGGREGATING TO RS.9.01 LACS STATED TO BE OBTAINED FROM THREE EN TITIES THE DETAILS OF WHICH HAVE ALREADY BEEN EXTRACTED IN PARA-2 OF QUAN TUM ASSESSMENT ORDER. ACCORDINGLY THE CASE WAS REOPENED AS PER DUE PROCE SS OF LAW VIDE ISSUANCE OF NOTICE U/S 148 ON 30/01/2015 WHICH WAS FOLLOWED BY STATUTORY NOTICES U/S 142(1) WHEREIN THE ASSESSEE WAS DIRECTE D TO SUBSTANTIATE THE STATED PURCHASE TRANSACTIONS BY FILING REQUISITE DE TAILS. ALTHOUGH THE ASSESSEE DEFENDED THE PURCHASES HOWEVER NOTICES I SSUED U/S 133(6) TO CONFIRM THE TRANSACTIONS REMAINED UNSERVED AND THE ASSESSEE FAILED TO PRODUCE ANY OF THE SUPPLIERS TO CONFIRM THE TRANSAC TIONS. RESULTANTLY THE 3 ITA NO.5731/MUM/2018 ATUL V. LOTIA ASSESSMENT YEAR-2010-11 STATED PURCHASES WERE DISALLOWED AND ADDED TO THE I NCOME OF THE ASSESSEE. 4. AGGRIEVED THE ASSESSEE CONTESTED THE STAND OF T HE LD. ASSESSING OFFICER BEFORE LEARNED FIRST APPELLATE AUTHORITY VI DE IMPUGNED ORDER DATED 05/07/2018 ON LEGAL GROUNDS AS WELL AS ON MERITS. T HE LEGAL GROUND RAISED BY THE ASSESSEE DID NOT FIND FAVOR WITH LD. CIT(A). HOWEVER ON MERITS LD. CIT(A) HELD THAT THE CORRECT APPROACH WOULD BE TO E STIMATE THE ADDITIONAL BENEFIT OR PROFIT EARNED ON THOSE PURCHASES AND NOT TO DISALLOW THE ENTIRE PURCHASES. THEREFORE INTER-ALIA RELYING UPON THE DECISION OF HONBLE GUJARAT HIGH COURT RENDERED IN CIT V/S BHOLANATH POLY FAB PVT LTD. 355 ITR 290 AND CIT V/S SIMIT P. SHETH 356 ITR 451 THE IMPUGNED ADDITIONS WERE RESTRICTED TO 12.5% OF ALLEGED BOGUS PURCHASES . AGGRIEVED THE REVENUE IS IN FURTHER APPEAL BEFORE US. IT APPEARS THAT THE ASSESSEE HAS NOT PREFERRED ANY FURTHER APPEAL. 5. AFTER CAREFUL CONSIDERATION WE ARE OF THE CONSI DERED OPINION THERE COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF MATERIA L KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS. UNDISPUTEDLY THE ASS ESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS AND THE PA YMENTS TO THE SUPPLIERS WERE THROUGH BANKING CHANNELS. THE SALES TURNOVER ACHIEVED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE. HOWEVER AT THE SAME TIME THE ASSESSEE MISERABLY FAILED TO SUBSTANTIATE THE PURCHASES AND COULD NOT PRODUCE ANY OF THE SUPPLIERS TO CONFIRM THE TRA NSACTIONS AND THEREFORE THE ONUS CASTED UPON ASSESSEE IN THIS REGARD REMA INED UNDISCHARGED. THEREFORE ON THE GIVEN FACTS AND CIRCUMSTANCES DI SALLOWANCE OF ENTIRE 4 ITA NO.5731/MUM/2018 ATUL V. LOTIA ASSESSMENT YEAR-2010-11 PURCHASES IN OUR OPINION WOULD NOT BE JUSTIFIED R ATHER THE ADDITIONS WHICH COULD BE SUSTAINED WOULD BE TO ACCOUNT FOR PROFIT ELEMENT EMBEDDED IN THESE PURCHASE TRANSACTIONS TO FACTORIZE FOR PROFIT EARNED BY ASSESSEE AGAINST POSSIBLE PURCHASE OF MATERIAL IN THE GREY M ARKET AND UNDUE BENEFIT OF VAT AGAINST SUCH BOGUS PURCHASES WHICH LEARNED FIRST APPELLATE AUTHORITY HAS RIGHTLY DONE SO. THEREFORE FINDING T HE ESTIMATION OF 12.5% TO BE QUITE FAIR AND REASONABLE WE DISMISS THE APPEAL . 6. RESULTANTLY THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH NOVEMBER 2019 SD/- SD/- (C.N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 20/11/2019 SR.PS:-**PP SPS '( )( / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. ' ! / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. + % - - / DR ITAT MUMBAI 6. ./0 / GUARD FILE / BY ORDER / (DY./ASSTT.REGISTRAR) / ITAT MUMBAI 5 ITA NO.5731/MUM/2018 ATUL V. LOTIA ASSESSMENT YEAR-2010-11 SR. NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATION SHEETS ARE ATTACHED/PART DICTATIO N COPY ENCL./ORDER FINAL BY HON.AM P.P SR.PS/PS 2 DRAFT DICTATED ON NOT APPLICABLE SR.PS/PS 3 DRAFT PLACED BEFORE AUTHOR P.P SR.PS/PS 4 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 5 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 6 APPROVED DRAFT COMES TO THE SR.PS/PS 20-11-19 P.P SR.PS/PS 7 ORDER PRONOUNCEMENT ON 20-11-19 P.P SR.PS/PS 8 FILE SENT TO THE BENCH CLERK 20-11-19 P.P SR.PS/ PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE AR 11 DATE OF DISPATCH OF ORDER